In a recent report called “Radical Innovation and Growth: Global Board Survey 2016 ” (link opens the pdf) we have results from a survey jointly conducted by Deloitte Denmark and Board Network – The Danish Professional Directors Association, that opens up much that can concern us about the current boardroom and its great difficulty with managing more radical innovation.

It seems within our boardrooms they are ill-equipped to managing in today’s world, grappling with the past, holding on, perhaps too tightly, to the present and certainly being unsure of the future. It is struggling to adjust to all that is entering their world.

In this report, they surveyed 614 global board professionals from a total of 50 countries during the period covered from November 2015 through to February 2016 and then published in February 2016.

I quote extensively from the Executive Summary and Introduction and urge you, the reader, to delve into the report which I found an easy read to understand and grasp the magnitude of this present boardroom discomfort.

It comes as no surprise to me, or many out there working to disrupt the incumbent but it makes for difficult reading that this is not addressed far more head on. This is a more than timely report in my view.

Corporations are under increasing attack and are really struggling to become more radical in how they can defend, secure and achieve growth. A lack of understanding innovation in all its forms is coming back to haunt them. They can’t seemingly handle radical innovation and there is even more of an imperative to learn.

The Survey wanted to understand the current mood within the boardroom

The survey set about understanding the current boardroom thinking about how to address  the exponential technology is affecting growth (and indirectly competitiveness) in international companies and organizations, they have gathered insight on how global corporate boards address and work with radical innovation and to what extent they see growth stemming from their efforts. Radical innovation is defined here as:

The report dug into the boards’ appetite for growth; how high is the bar? It looked at their risk profile and tolerance of failure. It examined the role of innovation in company strategy and its strategic importance on the board’s agenda. Is radical innovation a bulleted point at board meetings?

It questioned whether there is a clear alignment of innovation and growth goals. Do boards spend enough in terms of man hours, consultants or other expenditures on new initiatives? It asked if companies actually own a Division-X and if yes, to what extent they are successful.

It wanted to address the skill-set at board level to handle digital disruption and the urgency to act proactively. It set about the identifying of board barriers to handle radical innovation and finished with a set of recommendations based on their quantitative findings topped with first-hand experience and opinions from a number of selected global board chairs.

The respondents describe that competition and technology are among the four most important external challenges their companies are facing now. The issue was on how are the boards taking on the challenging responsibility of overseeing their companies’ radical innovation efforts?

It concludes: “At board level, what we are seeing is the beginning of a shift among board professionals’ responsibility. As if oversight of company strategy, risk management, succession planning, budgeting and forecasting, sales and marketing, operations, auditing, IT, remuneration and tax was not already a fight.

Now corporate governance includes overseeing new business development with its itchy elements of experimentation, demand for scalability, risk of failure and navigation in a fully digitized and unpredictable new business world. On top of this new business today is developed at a pace that leaves little time for thorough analysis and precise risk mitigation”

 The Common trends they found were:

• The two dominant barriers for boards working with radical innovation are lack of insight (47%) and lack of organizational design to handle radical innovation (46%).

• 40% of respondents have no director with sufficient knowledge about digital disruption and 43% feel their management invests too little to achieve their long-term growth goals.

• The boards’ failure tolerance is low as seen 18% try to avoid failure in all their dealings.

• The financial risk scenario is also conservative, 34% of respondents characterize their board’s risk appetite as one where they try to avoid big financial risk.

• There is a clear tendency towards expecting radical change coming later (in five years) rather than sooner (this quarter).

• A staggering 75% of companies with the highest growth expectations for the coming 24 months (above 10%) also own an actual Division-X (or equivalent). We see this result as a clear indication of Division-X actually driving growth. (Note: only 22% have a so called Division- X, with 58% of these starting this in the last two years)

• Radical innovation is still a new idiom at board level with 65% not having it as a formalized item for discussion or action at the board meetings. (Note: Understandable but not forgivable in this disrupting world)

Welcome to the era of disruption, it is a tsunami of issues being grappled with.

The report suggests that while global boards are taking action now, there is room for improvement. Especially when it comes to the need for greater insight into the area of innovative initiatives, grappling with organizational design, dealing with risk and failure, and sheer experience in working in the huge discomfort zone driven by accelerating technology.

“If work has become steadily more demanding for the global board member recently, at least there was a predictability associated with that work but it is all about to change.

Now, in light of massive technological disruption, the new workload for a board professional revolves around a risky, failure prone and unknown innovation territory as they can start seeing themselves as largely inexperienced new business development leaders”

I do recommend reading this report.

I certainly do recommend this report, it confirms much, it conveys much, it certainly helps to frame many of the issues the boards are less than certain about; of the uncertainties they are facing, of where their business will come from in the future.

Indeed how they are presently ill-equipped to fight on these new battlefields of future business creation in this disrupting world, as these are “largely inexperienced new business development leaders,” in a radically changing world of radical innovation.  With lots of uncharted waters entering the boardroom they need to become far more radical within themselves or will be drowned from not navigating this at all well, the worry is who and what else sinks with them?

It does seem the board members need a lot of help and it needs to come from well beyond the usual advisors but are they prepared to take different advice? It does not auger well as there does seem a real stubbornness to make real change and perhaps a belief that these disruptive forces are not knocking on their boardroom door. How wrong they so are!

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So what does block innovation? Arguably there are plenty of things up and down organizations: a lack of resources, an overcrowded portfolio of ideas, a lack of dedicated people, treating innovation as one off, keeping it isolated and apart from mainstream activities. The list could go on and on, no question.

Let’s take a different perspective.
If you could ask those that lead innovation, your senior organizational leadership, a series of question that might help unlock innovation blockages would that be valuable? This would need a good external facilitator as my recommendation who has deep innovation knowledge and expertise, able to manage the ‘dynamics’ within the room.

What would happen if you could get the leadership in a room together to discuss innovation which would allow innovation dialogues to emerge? Perhaps allowing those conversations that begin to build a common understanding, a common language for innovation?

Different views can surface for the challenges but they all need addressing. Gaining a working consensus to share across the organization so these blockages can be openly discussed and in time resolved.

That chance to surface different views and then map those into an emerging consensus as they start to address the hidden barriers and often personal blockages or misunderstanding that can occur.

As part of the Executive Innovation Work Mat methodology you need to find the dedicated time to allow a ‘robust’ conversation to occur within the leadership team to bring out the possible barriers and viewpoints.

I’d suggest these might be a great starting point, tough to manage but phenomenal to address through a clear leadership dialogue.

The ten innovation intractable challenges- surfacing real barriers to innovation.

Addressing the issue of unfamiliar responsibilities – new and different ways of working, of understanding, of allowing innovation to take hold and flourish is often demanding new ways of responding, often adding to increasing responsibilities. This needs surfacing.

Many holding leadership positions in our organizations are uncomfortable with innovation, it is too intangible, it was not something they worked upon, it often seems to ‘sit’ outside the normal processes and structures. It is full of risk and uncertainly.

Innovation demands new directions – making significant changes to the way the organization is run is very challenging, potentially disrupting and needs thinking through at the top level well.

To ‘hone’ an organization into a lean efficient and effective ‘machine’ is one thing, to allow diversity and conflicting signals to pervade and challenge this is extremely uncomfortable territory, so ring fencing this keeps it at bay! Is this the right solution, are we facing different times to manage our organizations in 20th century practices.

Inherited problems always surface – addressing countless and inherent problems is messy and requires dedicated resolution. Changing a culture to become more innovative can be a massive step in structure, organization and policies. How do we manage such a revolution, what is needed, what is a culture and environment for innovation anyway?

Problems within the organizations make up – inadequate experience and resistance to change especially surface when a person is not equipped to deal with it. Installing innovation capacity, capabilities and competencies needs figuring out. How long does this take, where can we turn too?

High stakes of innovation – demanding breakthrough innovation makes everyone feel increasing vulnerable, increasingly visible and leadership has a real responsibility to manage this risk and set of fears. They need to be ready to ‘positively react and encourage’ both in supporting winning solutions and extracting positive learning from failures.Can you run breakthroughs alongside incremental innovation activities, what is really different in how we manage these?

Scope and scale of innovation – Managing in scale and scope is demanding and requires well thought through systems and processes. To scope innovation needs robust business case approaches, its flexibility in its management and then to scale this up requires well established approaches and clear commitments to its engagement and execution. Are we really good at seizing ‘breaking’ opportunities and quickly scaling these up. Can we learn new approaches to this.

External pressures multiply – everyone has an opinion outside the organization, let alone inside. Balancing these different interfaces and the pressures from these as you explore innovation needs managing well. Avoid that trait of just keeping on the raising of expectations and failing to back this up by not actively work at this alignment. What does it take for the ability to deliver on the promise?

Influencing without full authority – key activities within innovation usually demand that you become reliant on others. You need to spend (seemingly) inordinate time explaining and gaining others buy in and their own identification with concepts so as to move emerging innovation concepts along the pipeline.

You need to find often imaginative ways of attracting across the resources needed. This is especially hard for senior managers to adapt too, the need to attract across, instead of simply expect, demand and simply take. How can we learn new ways or different ways where collaboration becomes the norm and we can learn to borrow and exchange resources across functions more freely?

Work more with a listening and feedback culture – this can be totally different from the way business has been conducted today, through a more hierarchical structure. Flattening organizations to allow greater two way flow sucks up time; it simply undoes or unpicks command and control over time. It takes time to establish and gain the confidence and momentum. You need to allow more for debate, it shifts and alters the hierarchy and structures and that is a big step into an unknown, yet it is necessary for organization change, to allow innovation to truly flourish on a more sustaining basis. What needs to be put into place to listen and respond to our organizations and customers’ needs?

The need to develop work group diversity – innovation asks for more diversity in opinion, it draws out more in thinking, in discipline, in alternative approaches and solution. This often leaves senior executives feeling they are less in control, reliant on other and that can feel scary and surface their own insecurities, buried increasingly as they moved up the organization and took on responsibility and accountability.

It challenges often their very notion of management as they have known and experienced it. Innovation in its management challenges many past notions of managing. How can we encourage a greater diversity of thought, of working, of judging performance that would help our organization’s absorption of different knowledge and approaches occurring all around us?

To summarize
Each of these ten innovation challenges needs to be surfaced at the right time, usually as early as you can, within any innovation executive work mat discussion. Each one of these ‘intractable’ points can individually block innovation from advancing – we must find ways to bring them out, to surface opinions and find common solutions to resolving them.

We need to build these into a common understanding to move innovation forward. To send out a compelling message into our organizations we are wanting to tackle these intractable’s to give innovation its rightful place within all our thinking and activities.

Finding that right moment is not easy to draw these out but it is certainly necessary, otherwise those (often) hidden barriers never come to the surface and get resolved, leaving innovation trapped unable to release its true voice and significant worth and value to the organization’s fortunes.

** The original list of the ten innovation intractable’s has been adapted from “creating learning experiences without changing jobs” by Cynthia McCauley at the CCL in 2006. I’ve applied it in a way for surfacing innovation issues and personal concerns at executive and senior organization level that need their resolution.

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I don’t think this is sour grapes of the people working away on innovation daily, that the ‘finger of failure’ is well and truly pointing upwards. There is more of an innovation knowledge gap at board room level or even just below this, than many can imagine, that is the plain reality.

They often simply have no real clue on how innovation really works and what their essential role is in connecting all the different parts necessary to align this into the organizations overarching goals, objectives and strategies.

Let’s simply select the top common causes of innovation failure.

In a recent survey I was reading*, it provided a set of results about the common cause of innovation failure. The survey was asking participants to check all that applied and although there were 30-odd possible reasons the top ten that stand out as head and shoulders above all the others are nearly all down to the simple failure of innovation engagement in its leadership.

Failure lies at the very top on why innovation fails.

I know I keep ‘going on’ about the Executive Innovation Work Mat and its value but let’s look at these top ten contributors for failure that is occurring in organizations just like yours. The Work Mat approach tackles these and lots more but those that are the cause of failure, the leaders in organizations, do need to understand it is them that are the reason for this.

So the top ten causes of innovation failure then tell me the root cause, a lack if innovation leadership.

The top three failures

The three main reasons for failure have been given as 1) unrealistic expectations from top management regarding resources and the time really required in achieving innovation, then 2) the lack of resources allocated in budget, people, infrastructure and 3) far too much focus on products and technology and ignoring the other options within innovation, such as service, business model, platform collaborations etc.

Each of these is without doubt for me a top management failure.

They either don’t have a real clue of the complexity of innovation, starve it of its essential resources or just want to stay well within their comfort zone of existing product and technology understanding.

This reluctance to push innovation, to extend capabilities and provide it with the right capabilities ends up in these continuing failures.

Equally not to explore all the types of innovation available does not make sound business sense. This shows a lack of real involvement, comprehension, understanding and engagement.

The next three failures
In our next three the one that is so constantly described as limiting innovation is 4) that people or teams operate in silo’s instead of broader collaborative approaches, 5) the wrong personnel are in place to make innovation happen and 6) that classic of classics, a poorly defined innovation strategy and the goals to achieve this.

Each of these again is a top management failure. They fail to understand the value of building up the capabilities for broader collaborations; they constrain the very essence that gives their organization its growth by holding back or not pushing for the best people to be engaged within the projects, or just fail to connect their (often) lofty strategic goals with the innovation activity that can deliver on this.

Again, simply failures of top management to address and resolve these issues are the root cause.

Then the last four within the top ten

The last four within the top ten again start with 7) a lack of innovation strategy, and then 8) where the emphasis is placed in far too much on idea generation and not on execution, followed by 9) a lack of involving external partners and lastly 10) poor management of the innovation process.

So again a clear set of management failures. By not having a clear overarching innovation framework in place that links innovation to strategic alignment, which communicates innovations value and its value position and then the failure to put in place all the critical factors of an innovation process to make sure that innovation, has the chance to work.

Surely this top ten list of causes for innovation failure does become fairly worrying to anyone involved in growth, wealth creation and building and wanting to belong to a healthy sustaining business?

Depressing outcomes and on-going failure

For me, I simply can’t understand why our leaders are simply not listening to the constant stream of innovation failure messages that get written daily. Of course, I hear you say “it is simply because they are too busy”. Oh come on, lets stop protecting them.

My argument straight back to this is “if a leader or his team does not focus on the clear ways to grow a business and make this happen and this must come primarily through innovation, then they should not be leading”. They should not be focusing on just making organizations efficient but on being increasingly effective through innovation.

How can they be leaders of organizations, claiming they are keen to grow and expand, if they do not get fully involved in providing the appropriate framework for innovation to thrive? This is a strategic leadership failure.
I can only assume they are simple not understand that they are the primary cause of innovation’s failure within their organization, they are the main culprits in this.

Will this change overnight, of course not?

Somehow or other, those within the innovation communities, both within and outside organizations have a job to do, a message to deliver to the leaders. They need to get across this failure message lies within the board room, not outside it and its needs addressing.

Deliver just one message today, please.

We need to deliver this simple message – “as long as you as the leader of the organization and those immediately around you fail to understand what ‘makes up innovation’ you deserve to fail, and more than likely, fail you will”.

Why not just give the leaders of most organizations an early Christmas reading present– you can download it here– it explains the connected part of the Executive innovation Work Mat that forms the strategic framework for innovation to connect across organizations.

Then we might begin to reduce this list of common failure points significantly. I do hope so, otherwise what’s the point?

* The survey was conducted by Stefan Lindegaard under his post Organizations and Failure: Why Don’t We Learn More?  I think he is looking within the organization more, whereas I see failure ‘sitting’ far more at the top of the organization.

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